Grey dealer prices and paying the premium

[m j b]

Try looking at it this way:

How much are you willing to pay for an OP? Think of it like a free market, where there is no MSRP and you can buy anything you like. Is it something that you like so much, that you'd pay €5000 for it? How about ten? Fifteen?

There are folks who wouldn't bat an eye spending 25K on a new Daytona. There are others who look at that and think, hey, I could buy a new Omega Speedmaster which is also a stainless steel chronograph, and it would cost me 1/5 the money for what is effectively the same watch. I know, I know, they're not the same, but functionally they both tell time and have subdials and look pretty.

I don't worry about MSRP and grey prices, I just consider do I want to spend $9000 (in my market) for a watch? Years ago, I had several $10k+ watches.

Today, for me, that answer is no.



I wonder if that helped at all?

[Uncle Meat]

I normally want everything yesterday so didn't mind going grey.
I simply hate waiting.

[Benzsiam]

Originally Posted by GSolo

I guess you're right about that, my relationship with the AD is fairly new, but it's slowly building, I've only bought one watch from them previously but I'm planning to add more as we go along. They're also Omega AD so might pickup a Seamaster or Speedmaster but still even if I buy one of those I can't be sure that it will "bump" me up for a Rolex at some point and that's kind of my concern hehe.

Normally if it is the same AD that carry multiple brands, they should count all items that you purchase from them. Don't buy something that you don't really like in order to get something you like, it isn't worth it.

If you like Rolex more than Omega, buy only Rolex. Not too long after Covid is getting better, watches market should come back to normal like before Covid. At that time, some Rolex models like DateJust, Air King ....should be available without long wait. You can get DateJust first to build up your relationship, next one can be Sub ND...and not to long, you will whatever you ask for with some wait time.

All of these, it depends on your luck too. If you have a good luck, you will get good SA at good AD, many things will come your way.

Wishing you a good luck!

[Jb1264]

Demand for the OP in the UK is strong
I’m trying to snag a black dial OP36
Asked my local AD last December
If it doesn’t materialise by April 2022 I’ll go down the grey route

[Laostuh]

In the current climate, I would go grey to guarantee and enjoy your purchase. I was at an AD yesterday in Brea, CA who basically told me they prioritize "loyal big spending clients". So even if you spent $20-30 thousand on misc. jewelry or other watches you're still not guaranteed to get the piece you're actually after. By that time you may have spent more than what it would've cost you if you just went grey market. As crazy as it sounds it might make more economic sense to grey unless you have a AD that's willing to turn a blind eye to their "big spenders" and get you a watch a retail.

[Snerks]

Originally Posted by Master_Grogu

There is a very easy choice: to live and let die. What if you can’t get the watch you want within a year or two. I’ve waited a while for things in my life and throwing money at problems isn’t how I do things.

However I understand you might have a different perspective and spend the premium to get something you really want right now. And honestly I respect you for that too because it’s 100% your choice.

A couple of questions, if you wouldn't mind.

Why do you view Rolex watches market value being greater than MSRP a problem?

Why do you see paying market value for a Rolex paying a premium? As opposed to, seeing ~18k for a BLNR the current value of the watch, and MSRP being a discount?

Thanks, and I guess I'm just trying to understand why some don't view open market / gray prices / the current going rate for these pieces as what they're worth, right now.

Again, you might not want to pay what they are worth, and thats fine - I get it and support and respect that entirely.

[Gab27]

I chose the route of buying a used model from a respectable secondary seller. I am satisfied with my decision. The reality is that an AD is probably not going to sell you the OP you want if that is all you want. They can make more money selling that watch to someone else. Market price would not be this high if you could just jump on a list and wait.

In terms of fair value, I effectively assumed my Sub would have no value at all after I purchased it, so for me the value is in wanting the particular watch. We are, after all, talking about a product that costs thousands of dollars and performs the same basic task as a $8 JC Penny watch lol

[kg19989]

Personally, I’d like to see everyone sit back and make these aftermarket sellers lower their prices. They’re charging what the sheep will pay. And don’t get me wrong, I’m all for a free market society, but everybody lets those guys go get them off the back door and then double the price. And again, most everybody here is letting them do it!! I also don’t know if you have a problem buying a used one with a little premium but when it has full stickers, that’s just straight from a dealer and it’s somebody trying to take advantage of the system that again we are society let them create. Sorry for my rant I’m just getting a little tired of waiting for mine. Cheers


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[JRell]

Just say no to greys.

[Kelvin Knight]

Originally Posted by Snerks

A couple of questions, if you wouldn't mind.

Why do you view Rolex watches market value being greater than MSRP a problem?

Why do you see paying market value for a Rolex paying a premium? As opposed to, seeing ~18k for a BLNR the current value of the watch, and MSRP being a discount?

Thanks, and I guess I'm just trying to understand why some don't view open market / gray prices / the current going rate for these pieces as what they're worth, right now.

Again, you might not want to pay what they are worth, and thats fine - I get it and support and respect that entirely.

MSRP is a value figure established by RolexSA based on their investment in patents, brand value, and time and cost to manufacture their product - the sticker price on their website is what THEY deem the market value to be. AD’s already get a discount and we’re already purchasing at a markup. Flippers and Greys are exploiting a supply/demand anomaly within this chain of distribution and are strictly either virulent or parasitic to it.

[Kelvin Knight]

I also don’t consider it a general consensus market metric just because a few outliers are willing to pay 20k for a watch someone else paid 9k for after it was already marked up from 4K by the company that made it that EVERYONE in the marketplace wants to do the same. I consider that a hijacking.

[PepsiBezel]

I do not see Grey vs AD purchases as a matter of patience, but as a matter of certainty and risk.

We all have different relationships with ADs, and thus a different level of certainty that a watch will be offered in a given timeframe versus risk it will never arrive.

If you have no relationship with an AD, there is a lot of risk the watch will never arrive, regardless of your level of patience. If you want a Daytona, GMT, or even a Sub there is a lot of uncertainty and risk you will never get it.

In all these threads there are generally three types:

1) Super VIPs. Absolute certainty. Long AD histories, probably spent $100K++, get anything sometimes without even asking. They don’t care, none of this applies.

2) No AD relationship. High uncertainty/Risk. Sad at first, but realize if they want that one or two watch they need to just go gray. If they can afford it they do it, if they can’t they keep dreaming.

3) Some AD relationship. Range of Uncertainty/Risk. They have some level of AD relationship, but aren’t VIPs. They are hopeful that based on their relationship - maybe a Datejust here, a Sub a few years ago, a Tudor, etc., their name will eventually come up for a current hot watch. They have some chance to get it, but will have to be patient.

Of course, every VIP who cuts in line and gets the hot watch and then unloads it to a grey who resells it to someone else hurts the chances of this third group… it makes their wait longer.

[dannyp]

Originally Posted by Snerks

In what fairytale land is open market value not fair value?

MSRP is a discount right now. Period. Ignoring simple economic principles is quite naive and not doing anyone any favors.

The best way to think about it is this: ADs aren't really retailers, they're wholesalers. They are supplying the "retail" market at wholesale prices. In the true "retail" market, there is no MSRP, but just a market-set price. Some are lucky enough to have a relationship and "know a guy," allowing them to purchase at wholesale, rather than retail.

[Mendota]

Originally Posted by Kelvin Knight

MSRP is a value figure established by RolexSA based on their investment in patents, brand value, and time and cost to manufacture their product - the sticker price on their website is what THEY deem the market value to be. AD’s already get a discount and we’re already purchasing at a markup. Flippers and Greys are exploiting a supply/demand anomaly within this chain of distribution and are strictly either virulent or parasitic to it.

Well stated!

[Kelvin Knight]

Originally Posted by dannyp

The best way to think about it is this: ADs aren't really retailers, they're wholesalers. They are supplying the "retail" market at wholesale prices. In the true "retail" market, there is no MSRP, but just a market-set price. Some are lucky enough to have a relationship and "know a guy," allowing them to purchase at wholesale, rather than retail.

No. No one at the consumer level can buy directly from Rolex at wholesale price. The AD’s are literally a trusted servant of the brand and it’s bridge into the retail sector. They get to pay wholesale prices solely because they bare all the risk of overhead and consumer market volatility.

[TexEd]

Originally Posted by Richris1

Time vs money…..I choose time. I’d rather enjoy now.

Exactly my view...I'm willing to pay a premium and have it now.

[GMT Aviator]

Originally Posted by TexEd

Exactly my view...I'm willing to pay a premium and have it now.

So if they grey price on say a Pepsi we’re to double from the current absurd Grey prices you’d still pay it?

[TexEd]

Originally Posted by Snerks

A couple of questions, if you wouldn't mind.

Why do you view Rolex watches market value being greater than MSRP a problem?

Why do you see paying market value for a Rolex paying a premium? As opposed to, seeing ~18k for a BLNR the current value of the watch, and MSRP being a discount?

Thanks, and I guess I'm just trying to understand why some don't view open market / gray prices / the current going rate for these pieces as what they're worth, right now.

Again, you might not want to pay what they are worth, and thats fine - I get it and support and respect that entirely.

You are correct in your reasoning and the same can be applied to certain popular and hot automobiles where they are selling above MSRP. You can wait for the automobile market to cool off at some point in the future or you can pay the current open market. I've bought both watches and cars at current open market with no regrets.

[TexEd]

Originally Posted by GMT Aviator

So if they grey price on say a Pepsi we’re to double from the current absurd Grey prices you’d still pay it?

I stated that I would pay a premium and that premium would be what I would be willing to pay. The percentage over msrp would depend upon what it is I am buying and my level of desire. The same could be applied to cars, boats, or even homes.

[Wahlberg]

Originally Posted by TexEd

I stated that I would pay a premium and that premium would be what I would be willing to pay. The percentage over msrp would depend upon what it is I am buying and my level of desire. The same could be applied to cars, boats, or even homes.

Are you only willing to pay over list because of the current market and climate of value retention?

So if the watch wouldn't hold it's value (let's say for example the market crashes and watches get sliced by 80 percent), you would still get it? Or is the desire gone knowing the value is gone? So the only reason you bought it is a wrong reason and not because you loved the watch?

[GMT Aviator]

Originally Posted by TexEd

I stated that I would pay a premium and that premium would be what I would be willing to pay. The percentage over msrp would depend upon what it is I am buying and my level of desire. The same could be applied to cars, boats, or even homes.

That’s a fair comment, understood. I just find the current level of excessive mark up being charged as vulgar quite frankly. Not for me.
Retail or not at all. I’ve only ever bought one at retail, all the other below MSRP.

[johnwigan]

Originally Posted by GSolo

Hi everyone

I'm in a situation where I'm trying to build a relationship to my local AD and I'm also on the list for an OP, lately however I've started to take a look at grey dealer prices here where I live and I'm trying to figure out if I should go down that route, pay the premium and just be done with it.

For example one dealer has a 126300 Datejust with blue dial from 2019 listed at $10.200 and a silver dial OP41 listed at $9560.

Now I've seen some debate here and there that it's not "worth" paying the premium for an OP since it's not as well regarded and desired as lets say datejusts and subs.

I guess what I'm trying to figure out is what is the fair value on these watches? It seems that a used 2019 datejust is a "better deal" price wise than going for an new OP41?

The flipper gets your purchase history with the AD and your cash. I would rather buy new. I want a new watch and I want the purchase history. The only time I would buy second hand would be if there was a big discount, which is not the case here. We are at the absolute peak of rolex shortage. Now is not the time to pay an inflated price for a second hand watch. A bit of patience is my advice. But your money, up to you.

[dannyp]

Originally Posted by Kelvin Knight

No. No one at the consumer level can buy directly from Rolex at wholesale price. The AD’s are literally a trusted servant of the brand and it’s bridge into the retail sector. They get to pay wholesale prices solely because they bare all the risk of overhead and consumer market volatility.

No sh1t. I’m saying that the ADs have essentially become an additional layer of “wholesaler,” in the economic/practical sense. Nothing about the available avenues of purchase have really changed.

[TexEd]

Originally Posted by Wahlberg

Are you only willing to pay over list because of the current market and climate of value retention?

So if the watch wouldn't hold it's value (let's say for example the market crashes and watches get sliced by 80 percent), you would still get it? Or is the desire gone knowing the value is gone? So the only reason you bought it is a wrong reason and not because you loved the watch?

I'll answer your question with a question...how will you know what the value of anything will be in the future? You buy a home, a car, a watch...you don't know what the future value will be. I bought my watches because I like them and want them. Future value might be up and it might be down but I really don't care.

[JSolution]

Always paid grey I’m happy with what I bought now so will Hope to acquire from AD in the future.

[Wahlberg]

Originally Posted by TexEd

I'll answer your question with a question...how will you know what the value of anything will be in the future? You buy a home, a car, a watch...you don't know what the future value will be. I bought my watches because I like them and want them. Future value might be up and it might be down but I really don't care.

I agree, that's the mindset. Buy what you like.

It's still crazy how the market has changed. Gold watches weren't that popular less than 8 years ago, discounts easily available. Yet no one bought them because the value retention wasn't there. Market has changed and now it's acceptable to spend the money on a DD or gold sub/gmt.

[Kelvin Knight]

Originally Posted by dannyp

No sh1t. I’m saying that the ADs have essentially become an additional layer of “wholesaler,” in the economic/practical sense. Nothing about the available avenues of purchase have really changed.

Still a no from me bro. There’s no logic in the notion that buying a watch from a retail chain is somehow now a “wholesale discount” because scalpers have leeched all the stock and artificially inflated prices.

It sounds like rationale to help people sleep at night after they get ripped off. Not my get down, but I’m also not the center of the universe. We can agree to disagree and that’s all good.

[eskiserkan]

If you are going to sell the watch at the same price you bought from the AD when you need money in the future ? Than, dont pay the premium and wait until you get it at your AD.

[dannyp]

Originally Posted by Kelvin Knight

Still a no from me bro. There’s no logic in the notion that buying a watch from a retail chain is somehow now a “wholesale discount” because scalpers have leeched all the stock and artificially inflated prices.

It sounds like rationale to help people sleep at night after they get ripped off. Not my get down, but I’m also not the center of the universe. We can agree to disagree and that’s all good.

It's analogous in that wholesalers typically don't sell to the general public and only to those buying in sufficient quantities, who then resell at retail. Well, that's essentially what happens with Rolex: Large volume buyers (whether VIP customers, flippers, etc.) are allocated much of the the stock, which then makes its way to the general public by way of the secondary market. However, even those just looking to buy in small quantities can sometimes buy directly from a wholesaler with the right relationship.

Yes, technically the AD is the ultimate retailer and the secondary market is the equivalent of bartering in a bazar. But in practical terms, that is the role the AD is playing Rolex is very much the exception in terms of its stock never actually passing through a wholesaler between its manufacturing and placement on a retailer's shelves.

[Mendota]

Originally Posted by dannyp

It's analogous in that wholesalers typically don't sell to the general public and only to those buying in sufficient quantities, who then resell at retail. Well, that's essentially what happens with Rolex: Large volume buyers (whether VIP customers, flippers, etc.) are allocated much of the the stock, which then makes its way to the general public by way of the secondary market. However, even those just looking to buy in small quantities can sometimes buy directly from a wholesaler with the right relationship.



Yes, technically the AD is the ultimate retailer and the secondary market is the equivalent of bartering in a bazar. But in practical terms, that is the role the AD is playing Rolex is very much the exception in terms of its stock never actually passing through a wholesaler between its manufacturing and placement on a retailer's shelves.

You know, after reading Kelvin's and your comments today I think both of you are dead on the money. I am completely in agreement with Kelvin, but your last comment really makes a lot of sense and I can totally see your point. I think you are both right. Isn't it crazy what this market dynamic has morphed into?

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